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Michigan House approves new emergency manager law

LANSING — The Michigan House on Wednesday night approved a replacement emergency manager law, after voters threw out Public Act 4 in last's month's election. The state Senate is expected to consider the measure today.

The House passed the legislation largely along party lines, 63-46, after rejecting numerous Democratic amendments. Gov. Rick Snyder has endorsed the proposal.

Democrats immediately criticized the bill as a copy of the controversial law that voters rejected that allows financial managers to come into a financially distressed community and take over its day-to-day operations.

"Once again this week, Republicans are demonstrating complete contempt for the voters of Michigan," House Minority Leader-elect Rep. Tim Greimel, D-Auburn Hills, said in a statement. "In November, 2.3 million Michiganders clearly demonstrated that they want transparency within their democracy and local control of their government."

Rep. Maureen Stapleton, a Detroit Democrat, said the new bill is essentially the same as the rejected law and merely offers local governments an opportunity to "pick their poison."

Rochester Hills Republican Rep. Tom McMillin said the legislation is needed for local governments "that refuse to deal with their spending problems." He said Pontiac has become a safer place because of an emergency manager who "came in and started to make adult decisions."

"This bill respects the will of the voters and protects our communities from financial disaster," said Rep. Al Pscholka, a Republican from Stevensville. "The goal is ... to get things back on track, restore fiscal integrity and restore local control. It's about local choice and fiscal accountability."

The new bill, Senate Bill 865, called the "Local Government and School District Fiscal Responsibility Act," gives communities four options to choose from if it is determined a financial emergency exists: A consent agreement can be reached, an emergency manager can step in, a mediator can conduct a neutral evaluation or bankruptcy can be declared.

Unlike Public Act 4, this replacement bill contains an appropriation of $780,000 to pay the salaries of emergency manager, which will keep it from being thrown out by the voters again. Like Public Act 4, this replacement bill will give an emergency financial manager the ability to break contracts, one of the more controversial pieces of the previous law.